The Power of the U.Plan Prepaid Tuition Program

Jonathan Hughes: Thank you so much. Okay. Thank you everybody for joining me for MIFA's Power of the U Plan U prepaid tuition program presentation. My name is Jonathan Hughes. And I am the Associate Director of College Planning and Content Creation at MIFA. I've worked at MIFA for a long time. You can see I'm slightly younger in that photograph there.

So I've been at MIFA for about 20 years, a little over 20 years, in fact, at this point. And, um, have worked with thousands of families, students to plan, save and pay for college. And I've worked specifically with the U plan for much of that time. So it's a, it's a program that I know very well and is very near and dear to my heart.

Uh, as I said before, this is going to be a fairly short presentation as far as they go. Uh, we have the hour, uh, but we're probably going to run about 40 minutes in the presentation and I can hang around afterwards to answer questions that you may have, uh, how you can sort of interact with me throughout this presentation.

I think we're all probably used to Zoom at this point. I would ask you Um, at this point to if you do have questions, not to actually put them through the chat, but to put them through the Q and a because it's easier for me to see them as we go along. And I can go ahead and answer questions as we go. I may read a question and if I know we're getting to that answer I might not address it right away.

So bear with me if I do that because I'm getting to that answer. Or I may think it's a better question for after the presentation, or if it seems like a question that maybe should be addressed one on one, um, you know, I can do that too. And, and, and as I've stated before, this presentation is being recorded, as you know, will be emailed to you and to anyone who registered.

So you'll have it. You'll also have my direct info, my, uh, phone number and email address. And I would recommend that you actually reach out if you have any questions and contact me directly about it. That's my job. That's what I'm here for. So, uh, please do not feel shy to do that. Now I want to tell you before we get into the U plan.

You're familiar with me for a little bit. Uh, if you're not too familiar, let me tell you who we are. We are the Massachusetts Educational Financing Authority, and we were created by the Massachusetts State Legislature back in 1982. So we just passed our 40 year anniversary. But we are a state authority with a public service mission to help families to plan, save.

and pay for college. Uh, and we do that in a number of ways. Okay. And so on the savings end, we have our U Plan program, also our U Fund 529. Uh, for the paying end, we have, uh, fixed interest rate competitive family educational loans that, that are available. And then for the planning end, we do a lot of free counseling and education.

This is an example of that tonight, but if you go to MIFA. org, you'll see all sorts of tools and calculators to be able to use. You can have a Recorded webinar of all of our webinars. You can you can watch all of our recorded webinars. You can sign up for our email services will send you one or two a month based on the age of your child or children with information that is going to be relevant to you at that time.

And one of the big things to me, you know, we have just a bench of college guidance experts that are available. to answer any questions that you may have. And so I see I already have a question into the Q& A and we, we can address that later on and I'll talk about that, um, after the presentation, I believe.

So, um, that's who MIFA is. I want you to think of us as a free resource. You're going to have questions after this is over in the realm of paying for college. Call us, email us, find us on social media, and ask. Tonight, we're going to be talking about the UPLAN, of course. So, what is the UPLAN prepaid tuition program?

Why would somebody participate in the program? What can it do for you? We'll go over the participating colleges and universities because that's one of the facets of this program has to do with the college that you're attending or the student is attending. We'll talk a little bit about financial aid, as we always like to do, and how the U Plan actually fits into financial aid and take you through the process of how you can actually enroll in the U Plan and manage your account online.

And again, Stop me with any questions that you may have or just submit them through the Q& A and we can, we can go through them. So as I said, the Uplant is a prepaid tuition program. So what does that mean? Now the Uplant does get a little tricky to talk about from, from time to time. And so I'm going to do my best to be as clear as I can.

When I first started working, I mentioned I worked at MIFA for over 20 years. And when I first started working at MIFA, uh, I'll be quite honest, I didn't know very much about the U plan and I wanted to keep it that way because it seemed complicated to me. And I couldn't imagine answering any questions about the U plan.

Then when I actually did start to work with the U plan, I got it. It was very cut and dry and very simple. You just kind of have to get it. And I could see what an enormous benefit it actually was for customers. Um, it's one of the very first prepaid. tuition plans in the country and it's a really innovative program.

And this is how it works. So, um, on July 15th, each year, your savings, you open an account, you can open an account throughout the year. You can do so online. You can do so over, you know, with a paper form, however you want to do it. You open up your account and you put your money in. You can put a one lump sum payment in or you can have an automatically sort of recurring monthly payment going in from a banking account into the U plan throughout the year as your money, let's say, is being deducted into your new plan account.

It's sitting in a money market. Uh, it's sitting in an account at the U plan, accruing interest at a money market rate, once July 15th hits, that's the blackout period. That means we take all of the contributions from the previous year, and that goes in to our bond purchase. So the money that you put into the U plan is not invested in the market.

but it is invested in general obligation bonds that are backed by the full faith and credit of the commonwealth. So we take whatever you put in, whatever interest accrued on it, we put it in to general obligation bonds. Now, depending on how much that is in your case, let's say you put in a thousand dollars throughout the year.

Well, that 1, 000 is going to lock in a percentage of tuition of that year and each participating college or university in the program. There are over 70 participating colleges, both public and private, and they were all in Massachusetts. So, let's say, for example, You put in your 1, 000. Now it says you must save at least 300 in total over the year.

That is the minimum to purchase a U plan certificate. If you put in 200, your money would stay in that U plan account, but it just wouldn't go into any general obligation bonds and wouldn't buy a percentage of tuition at all the participating colleges. But let's say again, you're over 300. It's 1, 000 for our, for our example, because I'm not too good at math and 1, 000 is easy for me.

Um, that's going to buy whatever percentage of tuition that represents at each participating college. So if a college costs 10, 000 this year, your 1, 000 buys 10 percent of that tuition. If a college is 30, 000 that year, then it it's going to buy 3 percent of that tuition. All you have to, you don't have to pick the college up front.

The only thing you have to do is put the money in and select what year or years you want that money to mature in. So one or more year that your student is going to be in college. So as I said, 300 is the minimum. There's no maximum. So let's say you put in your 1000 at a, at a college that costs 10, 000.

That is going to be 10 percent of tuition. Now, let's say that you chose that to mature in your son or daughter's freshman year in college, and by the time they get to their freshman year in college, let's say they go to that 10, 000 a year college, the one that they bought 10 percent of, well, by that point, tuition may be 20, 000.

So in that case, what they bought was 10 percent of tuition. So they've now got 10 percent of the 20, 000 or 2, 000. So since they bought 10 percent when it was 1, 000, they've got 10 percent now when it's 20, 000. So their 1, 000 turned into 2, 000 because they locked in that percentage of tuition, um, and mandatory fees Now, you can continue, sorry, I'm just going to go back.

You can continue. Uh, as the years go on to continue to put money in to the U plan and keep adding to the percentage of tuition that you purchased, and when you know that happens, you know, the, it's, it's going to be added. As long as you're putting money into the same maturity years, it's going to keep adding onto the percentage that you purchased and that percentage will, will increase over time.

You will get an annual statement every year that shows you what you put in plus the interest and it will give you all the participating colleges and all and the percentage that you have purchased at each participating college. You don't choose the college until it comes time to go to college. And when that happens you tell us okay, my student is going to this college.

send the funds there and we would tell you what it was worth and send it there. Now the obvious question of course becomes what happens if a child ends up not going to one of those 70, uh, public or private colleges that participate in the E Plan in Massachusetts. If that's the case you can transfer those funds over to another beneficiary or you can always cash out and get what you put in plus the interest.

And I see that question already being raised in the Q& A. Yes, you don't know. So how do you know, uh, when someone, and also somebody has a good question, how do you know when someone will attend college 15 years ahead? What if they take time in between high school and college or if they go into the military?

So yeah, you do your best to estimate when they're going to go into college. And so for most folks, that's going to be the year after they leave high school. So when the child turns 18, uh, that's not going to be for everybody. Of course, some people take a year off. Um, it's easy to, to, to estimate or to be off by a year.

Um, if that happens, we can hold onto these certificates until six years after they mature. So, um, you know, you can always say we're not ready yet. Don't send the funds. And then when they do go, you can send the funds. or cash the funds out, of course, when they mature, depending on the student's plans at that time.

So, um, again, we can hold on to these until six years after they mature, and then, and then, um, they will be worth what they are worth in the maturity year. We can talk more about that in a second. I want to get to this slide first. So locking in tuition and mandatory fees. Now this is what the U plan pays for.

It doesn't account for things like room and board, books or supplies. It only locks in tuition and mandatory fees. And so there's this whole notion of this timeline, right? Remember I said that every July 15th, that's when the cutoff is and the bonds are purchased August 1st every year. So they take all of the funds that were contributed into all the accounts.

And they use that to buy the bond purchase. So, let's use this year as an example. We're going to take all the money that people have been putting in since August, mid August of this past year. And when we go to buy our certificates or invest our money in our general obligation bonds, we are locking in that year's tuition at that year's rate.

So that is the, um, 23 24 academic year. So at this point, let's say you put in again 1, 000. and a particular college is just going to stick with this cost 10, 000 this year for 23 24. So at that point, your 1, 000 is going to buy 10 percent of tuition next year. If you continue the same amount and you keep putting in the same amount every month and you buy another thousand dollars, that's going to buy tuition at next year's rate.

which is in all likelihood going to be a little bit higher than it was this past year. So if you're putting in the same amount, that 1, 000, it may not quite buy 10 percent again this year. made by nine and a half percent. Um, but, you know, that can be added, that will be added to the percentage that you already have if you are putting your funds in the same maturity years.

Um, so if this is to say that the purchases correspond to the tuitions, of the year that you're putting them in. And they, they, they stack on top of each other and add on top of each other. Okay, I see a lot of questions coming in, so this is good. So what if our child goes outside Massachusetts? What if they decide not to go to college?

Again, so really popular questions. If your child goes to a non participating college, again, you have a couple of options. Number one, you can always hold for a year or two or three or up to six, in fact, to see if those things change. Uh, barring that, you can transfer those funds over to another beneficiary within the family, if that's an option.

If you have another child, or someone else who may end up using those funds at a participating college, you can transfer it over to that person. Or you can cash out and get what you put in. Plus the interest interest is always accruing on your investment after the bond purchase, it Moses before the bond purchase, when you put it into the account, it's growing at a money market rate.

Once it gets invested, it's growing at CPI. And so, um, you can always cash out and get what you put in plus the CPI back. There are no tax consequences for that for the federal government or for the state of Massachusetts. If you live in another state, there may be tax laws that, that impact that, but not for Massachusetts and not for, um, federal taxes.

So, um, So you have options if your children end up or child ends up not going to a participating college. So we went to the U Plan versus IRA, which is the best in returns? That I could not really tell you. Um, for the U Plan, the returns are either CPI, what you put in plus the interest if you cash out. or the percentage of tuition that you purchased at the college.

And the idea really is that your investment is going to keep pace with the increase in tuition, right? And so typically, I've worked with the U plan for almost 20 years. Uh, I would say most of the time, I mean, definitely most of the time, Your investment is worth more sent to a participating college than it would be cashed out.

There are certain circumstances when it is worth more cashed out and when that happens, no matter what you choose, the system must automatically cash out to you if it's going to be better.

What is the tax treatment for these funds? So I, you know, the money is post tax, not pre tax. The funds grow with, with um, with no taxes. Um, there may be some tax consequences for certain things, uh, but using the funds does not actually carry any tax consequences. The U plan generates two tax forms, one of them being the 1099 DIV, which is if you have over 10 of post maturity interest.

And what that means is that let's say you have a U plan and it is matured. But you're not going to use it yet, because maybe the student took a year off or not going to participate in college, but you think they may later on or, or what have you. So you're going to hold it for now. If you accrue 10 of post maturity interest at that point, after it matures, That has to be sent out in a 1099 to you.

Uh, same with a pre bond purchase. You know, if you have money in your account and before it goes into the bond, if it accrues more than 10 of interest, that has to be sent out to you. And now this year there's another form called the 1099 OID, um, which is for, um,

I can't, I'm trying to think what the O stands for, an OID, and it's a new form, I apologize. But it's for, um, interest added or value added to your investment. It's, it's, I'm not a tax professional. We had to send 1099s on it, uh, this year. Um, it is listed as tax exempt interest on those 1099s, but you should always refer to your tax, uh, professional for any tax advice.

Do they stop accruing interest? No, it doesn't stop accruing interest. Once the funds have matured, it continues to accrue interest, not at CPI any longer, but at the, um, money at the PMI rate, the money market rate. Um, and Post maturity interest is always cashed out to the owner upon distribution. Um, somebody wants to know, is it necessary or prudent to track the locking in percentage rate, or is there somewhere it is organized or communicated?

Yes, you will be communicated every year, and you'll be able to have online access to your account, and it will show. What your percentage is. So let me let me continue on and then I feel like I can address these questions a bit better. So the benefits of the U plan are the money grows federal and Massachusetts state tax free, right?

You put your funds in, it's growing the investment at CPI or money market index. It's growing without taxes. Um, Sabres can claim a Massachusetts state income tax deduction. So if you are participating in the U plan, you're putting in your funds, you can claim that on your Massachusetts state taxes up to 2, 000 for married filers filing jointly and up to 1, 000 for individual filers.

So that's just an added incentive to start a U plan and to continue to save. And as we said before, any unused money is returned without penalty and with interest accrued at CPI, meaning even if you can't use funds at the college for whatever reason, You can always cash out to own or get what you put in plus the interest back.

And as we said before, there's no need to select a college until it's time to attend. So this is just a visual representation of what it is that we're talking about here. College A, B, and C, three different colleges. College A is 5, 000, B is 10, 000, and C is 25, 000. With an initial investment of 1, 000, that's going to buy differing percentages at each one of those colleges from 20 to 10.

to four percent. And once again, uh, the, this is only for tuition and mandatory fees. The reason for that is we need one figure to base all of this on, right? So tuition is tuition. Obviously everybody pays tuition. Mandatory fees are defined as fees that every student is going to have to pay, you know, regardless of what their major is, regardless of whether or not they live on campus, regardless of, um, their grade level.

You know, there might be freshman orientation fees. Well, not everybody's going to pay that. Only freshmen are going to pay that. There may be lab fees associated that only certain majors are going to pay. And of course, room and board, if you're a commuter student, you're not going to be paying room and board.

So there's one tuition and fee figure. It is provided to the U plan every year by all of the participating colleges. They send us their tuition. and their fee figure. And this is the list of participating colleges and universities. And so I'm going to give you a minute to look at this while I read through the questions and see what folks are asking here.

Uh, are there any charges if you cash out? No, there is no penalty to cash out. What are the relationship rules for the beneficiary? Uh, the beneficiary must be someone in the family. So it can be, um, you know, child, nephew, niece, cousin, uh, what have you.

Actually, let me check on that. Let me check on that. I'm not 100 percent sure. It's been so long. Um, But I just, I will double check and get back to you on that. Um, so somebody said, I have taught in higher ed for many years, it's changing rapidly. What if things look very different in 15 to 20 years?

Intuition is not the same thing in the future. Will the U plan change? So all of the colleges have agreed in, uh, uh, have entered into the U plan, uh, program. They have, they have, you know, met in contract with the U plan. Uh, so if things change, if colleges leave the program, for example. They're they must honor the certificates that were purchased when they were part of the program if they come into the program, then they have to honor the certificates that have been previously purchased since the beginning of the program.

If things change, as far as tuition is concerned, you know, we are in contact with the colleges, we will make changes if we are able to and if you know it makes sense to. Certainly if tuitions decrease, uh, then. You know your, your investment is going to be worth more to you cashed out than it would be sent to the college so we must do it that way.

I can tell you that doesn't often happen. I'm not sure you know what, what else you were thinking of when it comes to tuitions. You know, if it's different types of tuitions or different programs, etc. Um, you know, it's a little hard for me to say without being specific but but basically MIFA and colleges do keep in communication about these things and and and things can.

Come on. So, original issue discount. That's what it is. OID. Thank you very much. Um, so, if you have only one child and that child isn't going to college, who can the funds be transferred to? So, they can be transferred to, to other folks in, within the family. If, if there's nobody to transfer those funds to, you can cash out and get what you put in plus the interest rate.

Plus the interest rate. Somebody wants to know, is there an average college cost that locks in the current year percentage if you don't have to select a school? Um, there really isn't. Um, but we do have, um, as I said, on, on our website. All the participating colleges and the most recent tuitions for those colleges and you can always call us up the plan and we do have historical data on the tuitions.

So that's something that a conversation that that we can have this is mentioned, as I said before, if participating schools change now the list of participating colleges has remained fairly static since I have been. working with the U plan. Um, it does represent the majority of private and public colleges in Massachusetts.

Most often schools have left the program. That's not because they have left the program per se, but because certain colleges have closed, uh, certain colleges have merged with other colleges. And one or two colleges have, um, turned into for profit colleges, which we are not able to accommodate any further.

Um, ha, so, so that's really been the only, uh, changes so far, but generally speaking, yeah, the list is fairly static. So in terms of financial aid, the U plan works pretty much the same way as any parent asset would work. And basically, When you're applying for your financial aid and filing your FAFSA, which is a free application for federal student aid, and this is going to be when your student is a senior, um, the form is going to ask you to list any assets that are in the name of the parent.

And so if you have a UPLAN account, what they want is to, for you to put Your cash value what you put in plus the interest on all your you plan accounts and put that in as as the value and that will be assessed just as any other asset is assessed, which is not very heavily. The financial aid formula basically assumes that if you have 10, 000 save for example, you're going to use 5.

6 percent of that tops. uh, for college. So that will sort of increase or decrease rather your financial aid eligibility by that 560. Meanwhile you have 10, 000 here to use. Uh, so it's treated very lightly in terms of financial aid. The value of your percentage, that doesn't come into it at all when calculating financial aid.

It's just looked at as a cash amount and it's the same as every any other cash that you may have. Um, when you're filing your financial aid forms. So, as I said, the U plan, as with other college savings, doesn't really, not typically, impact significantly a student's chance for financial aid. Okay, I'm going to answer some more questions before I go through how to enroll.

Okay, so somebody here has asked the question, um, is it better if the grandparents own the accounts because you're thinking ahead for financially because I just said, if parents on the account is going to go as a parent asset. In terms of financial aid it's better because they don't look at grandparent assets at all.

In fact, up until this year there was, there's a question on the FAFSA. That would have asked you to list any gifts received by grandparents or third parties in a previous year. So the year after, you know, not the first year that you're filing the past of the year after you use your gifts, you would have had to have reported it and then it would have gone to student income.

That's all going away. So yes, in terms of financial aid, um, you know, it wouldn't be counted at all if the, if the grandparents own the account. However, you should realize that there can be only one owner of an account and the owner is the only person who can actually use the money. They can only direct, they're the only person that can direct funds out of the account, cash them out to themselves.

Okay. The owner is the only person that You can actually get money from the account or send it to a college. Um,

okay. So let's see other questions that I may have.

Somebody wants to okay so just clarified 520 Fidelity 529 plan offered through my employer is in fact the U fund that we're speaking about. Now the U fund is a different account is a different program. This is the U plan. They're both MIFA programs. They're both college savings programs. The U Fund is a 529 plan.

It works differently. It's invested in the market. And it grows the taxes and you use it for qualified educational expenses. And you pay no taxes on the earnings. It doesn't lock in tuition like the U Plan does.

Now, somebody wants to know about a one time large donation for grandkids. Great. Um, that's fine. There's no maximum. You put money in, uh, you, all you have to do is put in your amount, designate the beneficiaries, you know, who the students are and what year or years you want to use the money in. Oh, one thing I did not mention, uh, about this is that there is a five year minimum between when you put money in and when it can mature.

So if we go through this application here. we will see that the fir if it's for this year, the 2023 academic year, the first year that we're going to be able to choose to have our money mature in is 2028. So this works better for younger children, children who are not yet in high school. Um, because, you know, you can contribute every year, every year, but once you get within five years of your first year in college, you start to lose the ability to lock in tuition for that year.

Okay. So let's go through this. How we can enroll. We go to me for. org slash you plan. And we put in our information here, first name, last name, email.

Then assuming we don't have an account already, we are going to create our account. We create first our user ID and our password. And the information that we need is our phone number, email address, and to confirm our email address. Um, then in order to set up an account, you need to first decide who's going to be the owner of that account.

Once again, the owner is the only person who can actually take money out of the account. And that person would need to provide their name, social security number, or, you know, tax ID number, uh, date of birth, address, email address. Then figure out who the beneficiary is. The beneficiary is the child for whom we're saving and they need to put in the same information.

You can designate a successor account owner. A successor owner is somebody who can step in and assume ownership of the account. if something were to happen to the owner. Now, a lot of times people think, well, there's a beneficiary on the account. So the owner would just, you know, if the owner were to pass away, God forbid, it would just the beneficiary become the owner.

The only owner needs to be 18 to take over the account. Um, so it really goes much easier if there is a successor owner on file. We'd need a copy of the death cert and that person could be then become the owner. Otherwise, it's a whole process. Now this is something that you don't have to set to add when you're setting up the account initially.

You can go back and add a successor account later on if you don't have all the information. But if you do and you want to do it, it's a good thing to do. Okay, so you've figured out all your human beings on your account and the next thing you need to do is select your maturity years. And this is where, um, you know, people start to really have to be careful.

And if there are mistakes made in the process, it's going to be here, right? Because it's hard to estimate when your child, especially if they're really young, what year they're going to be going into college. And when you're thinking about what year you want to put your money in, you should understand that.

Your money is being invested in a bond and this bond does not become liquid until this maturity year. In fact, it doesn't become liquid until August 1st of this maturity year. So think of the fall semester when one could start school. When do you want to use the funds? August 1st of that year. Um, if you make a mistake estimating when, when we have a guide that that should be able to help you determine what year is the right year.

Um, but if you do make a mistake. As I said, if you make a mistake too early, we can hold on to these accounts up until six years after the fact, and you can use them a year later. Um, it won't gain in value at the college past its maturity year. So if you have an account that matures in 2035, let's say about 100 percent of tuition at the college.

So you have 50, 000 or whatever it is at that time, and they go to college in 2036 and that tuition is 51, 000. You have 100 percent still of 2035 tuition, or 50, 000. So it doesn't gain in value past that, that, that extra 1, 000. It's worth what you put in, uh, what you would have gotten in the maturity year.

But, you know, that's usually a small amount and there is post maturity interest that is cashed out to you. Um, so that's what happens if you estimate too early by accident. If you estimate too late, you know, you can contact us. And you can always, as soon as you realize that you may have made a mistake in calculating your maturity years, you can contact us and ask for a maturity year change.

And that is something that we will work on for you. We cannot guarantee that we'll be able to change the maturity years. It really depends on sort of our behind the scenes, um, you know, the bonds that we own and, and we have to match them up to the ones that, that you want and in the same years that you purchase.

So, um, it can take a while, but we will take the request. We will make that change if we're able to. And if we're not immediately able to do that, we'll keep you a request on file and we'll revisit it every month to see if we can move those maturity years. So we, we we're gonna do our best to, to, to make that change if we can for you.

If we can't, um, you know, it, it's, it's, we can hold onto them until later or it's, it's gonna be fairly easy to use them a year early. But, um, and then you can make a one-time savings. So once you, you got your years, um, you can make your one time deposit or set up an automatic recurring draft.

As I said, the maturity year should be one or more of the years in which you expect your child to attend college. And so the way you want to designate it is, you know, it's going to give you a list of years to choose from. And what you want to do then is to just. designate what percentage of your contribution is going to go to each year.

So if you want to put money in for each of the four years that your child is going to be in college for, you can put 25 percent, 25 percent, 25 percent, 25 percent if that's how you want it evenly distributed. You can choose to put a hundred percent of your contribution in your child's freshman, freshman year.

Some people like to do it that way. Some people reason that they're going to have, uh, the bigger bang for their buck by putting it at the end and putting a hundred percent in their child's sophomore year. It's not too common, but some people do do that. Um, you know, people split it up, however, they're able to do it.

But most people, I tend to think these days, you know, want to spread it out over four years. So you select your, your method. Your frequencies, how much or how often you're putting in funds and your percentage to each maturity year, then you can add your bank account information and make a one time contribution, or you can send in a paper check if you want to do that.

Or you can put in your banking information again. And select a recurring draft or automatic deposit, you know, to, to make things, um, even easier. And in fact, I think, you know, we know from our experience and I know from my own experience, people tend to save more when it's coming right out of their account.

a bank account and they don't even realize it's there before it's gone. So, um, we know that people who do set up that automatic deposit tend to save more. So you can set that up however you wanted to do it. And you can go and visit your account online if you have an account already or if you are just creating it through the website, you know, you can go and, and, uh, And set up a username and password and have online access to your account, you're going to get quarterly statements from the plan about your investments and you know what they're doing.

And one of those the yearly statement is going to have the tuition percentages report which shows you what you put in the interest that accrued and what percentage you have purchased of tuition at each participating college or university in Massachusetts. That way you kind of know where you stand at each of the colleges.

You can also check your balance when it comes time to use the funds. You can actually just process your distribution to the college right on the website or you can call up and do it over the phone. You can open up other accounts online as well and change your contact information. Now somebody wants to know, are funds paid directly to the school?

Yes, if you are, if your son or daughter is attending a participating college, if, if you want that to go to the school, then it's going to be worth the percentage of tuition and fees. If you're having it cashed out to you as the owner, it's going to be worth what you put in plus the interest. Again, it's almost always worth more sent to the college.

So if that's an option, then, then I would definitely recommend that. So, um, who becomes the owner, who becomes the successor owner if the owner dies before the funds are fully dispersed? Well, if that happens, then it goes through a sort of legal channel, right? So you have to go through probate, and it goes to whoever is the executor or executrix of the estate, and, um, and that person then becomes the owner and can do what they, what they will with it.

Somebody wants to know if there's a way to transfer funds from a 529 plan into a, uh, a U plan. Um, no, I don't think that there is. If you're cashing out of a U fund, that's going to be a taxable event. But I will say this, you can have both a 529 and a U plan as well. Um, and the reason that you may want to do this is both of those programs.

have really good things going for them. Um, the youth fund is very flexible. It can be used at a lot of different colleges for a lot of different purposes. The youth fund, the youth plan can be used at these, you know, if it's going to be used to lock in a percentage of tuition, can be used at these 70 colleges and universities in Massachusetts.

It can, it can be a really big return if you, if you get there early enough and if tuition rates go up enough, but it only locks in tuition and fees, right? So you could have a U plan to lock in tuition and fees and have a U fund or 529 to pay for other expenses there, like room and board, books, supplies, equipment, etc.

Um, so I think, you know, rolling it over, we can accept rollovers and it's going to be a taxable event anyways, if you, if you, take funds out of a 529. Um, but you can do both. You can do both if you're able to do that.

Okay. So if you like the plan, you can enroll at MIFA. org slash UPLAN. Again, we mentioned quarterly statements are going to detail what you have in there plus the interest. And this is us on social media. You can follow us. We'll be posting a lot about things like college savings and the UPLAN in particular.

I'll leave it up there a little bit and I'll go through the questions again. I know. Uh, we, it was a lot of sort of conversational thing, which is great. Uh, so if you have questions, keep writing 'em in and I'll, I'll, I'll keep answering the questions. How does a loan forgiveness program affect us? Uh, it does not, uh, affect it, uh, as far as I know, uh, there, there's nothing, uh.

I don't know what's happening with the loan forgiveness program if it's going to happen or what and I'm not sure that, um, if it's at the Supreme Court, of course, and we won't know for a while, but I don't know of a way that it would affect. Do you plan

somebody wants to know there many estates don't go through probate can a successor owner like a spouse child be named. You can name a successor yes and that person would take over if the owner were to pass away without doing appropriate. If there is no successor, then there would have to be that process.

That is my understanding, I'm not a lawyer, but that is the process as far as I've always known it. If that helps.

Any other questions regarding the U plan?

Okay, so what does it mean? This is a good question. What does it mean that within five years of the maturity date, which might kind of be locked in? Okay. Yeah, I apologize. I introduced that concept a bit late. So, um, I will, uh, I'll go ahead and let you know. So when you start a U plan account, you put your money in and you select a year.

Or years that you want to use the money in. But the money that you put in needs at least five years to be available. So I couldn't start a U plan for my son. If he was going to college next year, I didn't have enough time. Um, you know, it has to be a year that you're putting in money for has to be at least five years out from the time that you're putting it in.

So if you've got a two year old, you can put money into that two year old's freshman year of college, save money for that student's freshman year of college up until, um, uh, eighth grade, their eighth grade. After that, once they head into high school, you can't save. You can't lock in the rate for their freshman year anymore, you can still lock it in for their sophomore year junior and senior year, but not their freshman year because you're within that five year window.

The next year, when they're a sophomore in high school, you're only going to be able to, to select. Their junior or senior year, because again, you're within the five years of their sophomore year. I'm thinking about this right, but if, if, if that makes sense. So if your students are in high school already, if they're close to high school age, um, you know, you might have only a few years to, to lock in rates.

Oh, yes. Good question. Uh, no funds can this can only be used at for a percentage of tuition at undergraduate or undergraduate degrees, not for graduate degrees

and CPI has been high lately we assess it. You know, as we know, and we assess it every August, it gets added to your account every August. And so we take the CPI rates from August to August, add that amount each year. Um, I am not sure what it is right now. I can find that, uh, that answer and get back to you, but you would be able to see that rate if you had a, um, Pro, if you had an account, you can go online and see what your CPI, um, interest accrued would be.

Oh, excuse me.

Any other questions? Okay. So if the account has already started, can we still contribute within the five years of attendance, even if the rate isn't locked? So no, if you, if, even if you have an account. Uh, once you start to, to, to get within five years, because you're putting money in, uh, into a bond that needs at least five years to be able to mature and to become liquid.

Great questions. Thank you so much. I'm gonna hang around for another minute or two, but, uh, I see I'm losing a few folks here, but, uh, you will receive a copy of this recording, as I said, and a, uh, a deck of the slides here. So,

well, thank you guys so much. Um, have a great night. And if you have any questions, please don't hesitate to reach out to me. I'll be emailing you shortly. Thank you everyone.

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